How will the billion people who still use older 2G cellphones use them to pay for goods, just like people with smartphones equipped with near-field communications (NFC) wireless links? One answer is to place a tiny 2G base station at the point of sale so that those older non-NFC phones can also make a short-range transaction securely.

So says Cambridge Consultants Limited, a UK-based technology development firm which demonstrated what it claims is the world's smallest cellphone base station system at its lab on 8 November. Called Sidewinder, "it's an entire GSM network running on one circuit board", says Monty Barlow, head of CCL's signal processing group. "It has everything a cell tower would need to run eight simultaneous 2G cellphone calls. That normally needs racks and racks of equipment."

Crucially, the circuit's power can be turned down to give it a low range of a metre or so. So any transactions undertaken - extracting cash charged up on a SIM card, say - are not being beamed to a distant cell tower where they may be intercepted by attackers en route. "We can detect the proximity of those old phones and deliver a number of services to them securely," says Barlow.

In CCL's demo, the circuit was shown running calls on three 2G phones simultaneously. The system's secret is the fact that its cellphone format and power is entirely defined in software. That means it has the capability, with a software update, to become a highly portable 3G base station, or a white-space radio, that could allow the fast setting-up of other types of ad-hoc network - such as after earthquakes or extreme weather events when other networks may be down.

However, cellphone frequencies are an expensive resource for which networks pay billions of dollars, so CCL cannot use them at will. The company is hoping to strike deals with network operators that might add Sidewinder services to their networks.